On June 21, 2015 The Economic Policy Institute (EPI) published a piece about CEO compensation. The piece is very detailed and paints as ugly a picture as any imaginable about the extent to which corporate America cuddles and pacifiers it CEOs while on the other hand fighting against a fair wage for workers. While not part of the EPI piece watch as corporate America fights President Obama’s proposal of paying overtime pay to lower level managers and salaried employees. It is important to note, industrialist like the Koch has total disdain for Overtime pay as it is currently structure, an you imagine the fuses that will blow as the CEOs across the land fight overtime pay for salaried employees.

If you recall prior to his electoral demise, Eric Cantor (R-VA), House Majority Leader, was floundering around with talk of eliminating overtime pay (period). I also recall conservative talk about expanding the work week. No Republican would dare speak as such without approval of industrialist like the Kochs. Cantor’s guise was eliminate overtime pay to provide more family (home) time for child-rearing and family harmony. Of course, and what would the wealthy House Majority Leader have proposed to deal with forced work over 40 hours in a week that would surely have followed via managers extracting more work for less pay.

Cantor and the GOP sought to affect pay policy and practiced changes on the lower end, while sitting in total compliance with burgeoning executive compensation.

The EPI report follows. You will find the article heading, sub headline and conclusions. While I have in the past received permission to post full articles off the EPI website, this article should be viewed at the source.

Top CEOs Make 300 Times More than Typical Workers

Conclusion

It is sometimes argued that rising CEO compensation is a symbolic issue with no consequences for the vast majority. However, the escalation of CEO compensation and executive compensation more generally has fueled the growth of top 1 percent incomes. In a study of tax returns from 1979 to 2005, Bakija, Cole, and Heim (2010), studying tax returns from 1979 to 2005, established that the increases in income among the top 1 and 0.1 percent of households were disproportionately driven by households headed by someone who was either a nonfinancial-sector “executive” (including managers and supervisors and hereafter referred to as nonfinance executives) or a financial-sector executive or other worker. Forty-four percent of the growth of the top 0.1 percent’s income share and 36 percent of the top 1 percent’s income share accrued to households headed by a nonfinance executive; another 23 percent for each group accrued to financial-sector households. Together, finance workers and nonfinance executives accounted for 58 percent of the expansion of income for the top 1 percent of households and 67 percent of the income growth of the top 0.1 percent. Relative to others in the top 1 percent, households headed by nonfinance executives had roughly average income growth, those headed by someone in the financial sector had above-average income growth, and the remaining households (nonexecutive, nonfinance) had slower-than-average income growth. These shares may actually understate the role of nonfinance executives and the financial sector since they do not account for the increased spousal income from these sources.7

We have argued above that high CEO pay reflects rents, concessions CEOs can draw from the economy not by virtue of their contribution to economic output but by virtue of their position. Consequently, CEO pay could be reduced and the economy would not suffer any loss of output. Another implication of rising executive pay is that it reflects income that otherwise would have accrued to others: what the executives earned was not available for broader-based wage growth for other workers. (Bivens and Mishel 2013 explore this issue in depth.)

There are policy options for curtailing escalating executive pay and broadening wage growth. Some involve taxes. Implementing higher marginal income tax rates at the very top would limit rent-seeking behavior and reduce the incentives for executives to push for such high pay. Legislation has also been proposed that would remove the tax break for executive performance pay that was established early in the Clinton administration; by allowing the deductibility of performance pay, this tax change helped fuel the growth of stock options and other forms of such compensation. Another option is to set corporate tax rates higher for firms that have higher ratios of CEO-to-worker compensation. Other policies that can potentially limit executive pay growth are changes in corporate governance, such as greater use of “say on pay,” which allows a firm’s shareholders to vote on top executives’ compensation.

– The authors thank the Stephen Silberstein Foundation for their generous support of this research.Read more linked in title above________________

If you failed to read the article or parts of the article, you robbed yourself of eye-opening information related to income inequity. The very CEOs represented in the report, probably spare no effort or expense in holding down earnings of workers and employees from Manager job Category down through Service Workers.